We are required to annually audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD) in accordance with the Chief Financial Officers Act of 1990 as amended. This report supplements our report on the results of our audit of HUD’s principal financial statements for the fiscal years ending September 30, 2013 and 2012 (restated). Also provided are assessments of HUD’s internal controls and our findings with respect to HUD’s compliance with applicable laws, regulations, and governmentwide policy requirements and provisions of contracts and grant agreements.  In our opinion, HUD’s fiscal years 2013 and 2012 (restated) financial statements were fairly presented except for the (1) statement of budgetary resources lines impacted by the accounting for programs from the Office of Community Planning and Development (CPD) and Government National Mortgage Association (Ginnie Mae) and (2) accounting and presentation of balance sheet and statement of net cost lines affected by HUD’s implementation of U.S. Treasury cash management requirements in the Office of Public and Indian Housing’s (PIH) Housing Choice Voucher program. Our opinion is reported in HUD’s Fiscal Year 2013 Agency Financial Report. The other auditor and our audit disclosed 4 material weaknesses, 11 significant deficiencies in internal controls, and 5 instances of noncompliance with applicable laws and regulations, which are discussed further in this report and the reports of the other auditor.  Fiscal year 2013 is the 23rd year HUD has been subjected to a financial statement audit. The basis for the qualified opinions, material weaknesses, and significant deficiencies reported this year have root causes first reported in previous years. This year’s material weaknesses are due in large part to HUD’s longstanding weaknesses in internal controls over financial reporting. These control deficiencies are due to HUD’s inability to establish a compliant control environment, implement adequate systems, recognize required changes, or identify appropriate accounting principles and policies.